Bowing To Trump Hours After GM Spat, Ford Cancels Mexico Plant

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Ford custom transit EV reveal January 2017

Take your pick about which announcement Ford made today that was more stunning: its decision to flesh out its strategy for going full-barrel into production of EVs and automated vehicles, or its decision to reverse course and not build a new small-car plant in Mexico.

CEO Mark Fields chose the setting of a Ford plant in Flat Rock, Mich., south of Detroit, to reveal both things. He confirmed seven of the 13 new global electrified vehicles that Ford plans to introduce in the next five years, including a hybrid version of its F-150 pickup truck, a Mustang hybrid and a Transit Custom plug-in hybrid (at top).

Fields also announced that Ford will invest $700 million and create 700 new jobs at the Flat Rock assembly plant to support producing high-tech electrified and autonomous vehicles within the next few years, a revelation that came about as close as any large automaker has come to pinpointing a production site of the self-driven car of the future.

But while his promises to Flat Rock reportedly produced hearty cheers among the workers assembled to hear him at the plant, which also makes the iconic Ford Mustang, it was what he had to say about Ford’s Mexican operations that elicited slack-jawed responses.

Just hours after Trump stirred up a public spat with General Motors with a threat to tax any Mexican-made versions of the Chevy Cruze — which it rebutted with the statement “GM builds the Chevrolet Cruze hatchback for global markets in Mexico, with a small number sold in the S” — Fields announced that Ford is canceling plans for a new $1.6 billion plant in San Luis Potosi, Mexico.

That’s where the automaker had been planning to build the Focus small car, after a year-long public battle with presidential candidate Donald Trump about the virtues of its North American production strategy and its impact on jobs in the United States.

In an unforeseen victory for the president-elect’s strategy of browbeating US-based companies to align with one of the strongest planks of his campaign platform, Ford finally blinked. The Focus still will be built in Mexico, but at an existing factory, in Hermosillo. The car was built at a plant in Wayne, Mich.

While on the campaign trail, Trump had repeatedly bashed Ford for deciding to take all of its production of small cars out of the United States—even though the Wayne plant is expected to preserve all of its old jobs by building new Ford trucks and SUVs.

Not surprisingly, Fields trod a middle ground on Monday in explaining the Mexico decision to reporters. “We’ve made this decision independently on what’s right for Ford, but we look at all the factors,” Fields said, according to Automotive News. He told the media that sales of small cars have been fading anyway because of relatively cheap gasoline, so that Ford might have made the decision no matter who will be president.

On the other hand, last year Fields had said it was too late for Ford to reverse course on the Mexican plant. And today, he threw the president-elect a bone, telling journalists, “Our view, we see a more positive US manufacturing business environment under President-elect Trump and the pro-growth policies and proposals he’s talking about.”

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